SUNDRUG CO.,LTD.

Business Details

This business is operated by the Company (Sundrug Co., Ltd.) together with Seikodo Yakkyoku Co., Ltd., Sundrug Plus Co., Ltd., Ohya Co., Ltd. and others. It is centered on the sale of pharmaceuticals, cosmetics, and daily necessities, and also operates a dispensing pharmacy business and an e-commerce business. Under the keywords "providing peace of mind, trust, and convenience," the segment covers the entire country through a variety of store formats, including shopping streets, entertainment districts, and stand-alone or complex-type suburban stores. As of the end of FY2026 (ending March 2026), the segment operated 1,155 stores (886 directly operated stores, 84 stores of Seikodo Yakkyoku Co., Ltd., 76 stores of Sundrug Plus Co., Ltd., 72 stores of Ohya Co., Ltd., and 37 franchise and other stores).

Recent Overview

Revenue and profit increased on strong dispensing pharmacy/e-commerce performance and improved trading terms; store count expanded to 1,155

In the drugstore business for FY2026 (ending March 2026), revenue from external customers was ¥478,404 million (up 4.3% year on year) and operating income was ¥27,481 million (up 3.1% year on year), representing an increase in both revenue and profit. While seasonal merchandise, mainly cold remedies, declined due to a rebound from the previous fiscal year, this was offset by the effect of existing store renovations, strong performance in the dispensing pharmacy and e-commerce businesses, and strong sales of stockpiled rice. Gross profit margin improved by 0.2pt due to improved trading terms since the end of the previous fiscal year. The number of stores at fiscal year-end expanded to 1,155 (up from 1,124 at the end of the previous fiscal year).

Key Products

Growth Drivers

• Expansion of the store network through new store openings and renovations (73 new stores opened and 79 stores renovated in FY2026 (ending March 2026); plan to open 68 new drugstore business stores in the following fiscal year)
• Continued expansion of the dispensing pharmacy business (increasing prescription demand against the backdrop of the declining birthrate and aging population)
• Expansion of the e-commerce business (in response to changes in consumer purchasing behavior)
• Improvement in gross profit margin through improved trading terms (0.2pt improvement in FY2026 (ending March 2026))
• Expansion of private brand products and development of new categories
• Improved productivity through the promotion of digitalization (labor savings) across various operations

Risks

• Intensifying store-opening competition with other companies in the same industry and progress in industry consolidation among major companies
• Impact on revenue from fluctuations in demand for seasonal merchandise such as cold remedies (due to weather factors, rebound from the prior period, etc.)
• Growing consumer cost-consciousness and frugality amid prolonged price increases
• Risks related to legal amendments and regulatory changes concerning the sale of pharmaceuticals
• Pressure on profit margins from increased depreciation and amortization (¥11,930 million in FY2026 (ending March 2026)) associated with aggressive new store openings and renovation investments
• Labor shortages and rising labor costs stemming from the declining birthrate and aging population (salaries, allowances and bonuses of ¥62,654 million, up 7.6% year on year)